Reliance Industries Ltd, which acquired interests in the cable networks Den and Hathway in October, has established seven subsidiaries to supervise its content activities and growing telecommunications, a senior management said.
These subordinate firms are Jio Futuristic Digital Holdings, Jio Internet, Jio Television, Jio Digital, Jio Digital Cableco Pvt, Jio Content Distribution Holdings, Jio Cable and Broadband Holdings, said on the basis of anonymity.
“These alliances would be active in data and hosting services for individuals, broadcasting, broadband internet, cable distribution, wireless services, video-on-demand, and voice-over internet protocol among other things,” added the manager.
Analysts said the newly created companies would help RIL to effectively manage the different segments of its telecommunications and content businesses.
“RIL prefers to create subsidiaries for different activities, is easier to manage, distribute risk and raise money with the support of RIL,” said an analyst at a Mumbai brokerage. “In addition, if the company wants to merge these subsidiaries later, this is also possible.”
In October, RIL poured Rs 2,290 Crore for a 66% stake in Den Networks Ltd, Rs 2,940 Crore for a 51.3% stake in Datacom Ltd and Hathway Cable. through its faster broadband services, helping JioGigaFiber, and reducing cost of customer communications achieve last-mile connectivity.
The subsidiaries would also set up or promote companies in the areas of entertainment, information technology services, telecommunications, e-commerce, production of telecommunications equipment.
It is RIL’s policy to determine a significant subsidiary of the Company when its income or shareholders ‘equity exceeds 20% of the Company’s net income or shareholders’ equity.
According to RIL’s annual report for 2017–2018, the company sold or merged 26 subsidiaries. RIL is the parent company of 84 Indian subsidiaries and 42 foreign subsidiaries. It also has 25 Indian companies and 7 associated foreign companies, 20 Indian companies and 5 foreign joint ventures.